Understanding California’s Housing Affordability Crisis

According to an October 21, 2018 Los Angeles Times article, experts “agree that the fundamental issue underlying the state’s housing crisis is that there are not enough homes.” In contrast, according to the article, is that “the public doesn’t believe it.” Only 13 percent of registered voters cited “too little homebuilding” as a principal reason for California’s housing unaffordability, in a USC/Dornsife Los Angeles Times poll.

The ultimate cause of California’s housing crisis is more than just not enough houses. More precisely, it is not enough houses that can be afforded by a shrinking middle-class, while the cost of affordable housing for low-income households has become insanely prohibitive for taxpayers (below). There may be no better proof than the fact that many households are “doubling up” (a term coined by the Census Bureau to describe sharing of houses by two households) — a phenomena far more common in places like Southern California or Silicon Valley’s San Jose metropolitan area than in the rest of the country. (Note 1).

The housing affordability problem in California cannot be solved unless its causes are understood. This article outlines the fundamental causes.

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